Alimentation Couche-Tard Inc., North America's second-largest convenience store operator, has struck a deal with Irving Oil Ltd. that will see the two companies team up in 252 Irving gasoline stations in Atlantic Canada and New England.
Montreal-based Couche-Tard will lease the properties and run their convenience stores under its own brands, while Irving Oil, a huge privately-held refiner and energy retailer based in Saint John, will remain the owner and supplier of the stations. The companies didn't reveal the financial terms of the profit-sharing agreement.
The agreement builds on a seven-year-old deal in Quebec between Irving and Couche-Tard, which owns about 5,700 convenience store locations in North America under the Couche-Tard, Mac's, Circle K and other banners.
Irving Oil's expanded partnership with Couche-Tard reflects the increasing willingness of the intensely secretive Irving family to open the corporate curtain to outside collaborators.
Irving Oil and British energy giant BP PLC are investigating the possibility of a joint venture to build a $7-billion refinery in Saint John, which would double Irving's 300,000 barrel-a-day capacity in that city. BP has already agreed to contribute $40-million to a $100-million study. Irving Oil also is partner with Spanish petroleum giant Repsol YPF in a new liquefied natural gas terminal being constructed for $1-billion on the Bay of Fundy.
These outside arrangements come as the Irving family is negotiating a reorganization of its vast forestry, energy, retail, real estate, steel and trucking interests to deal with estate planning and succession issues.
The partnership with Couche-Tard allows Irving Oil, which has a network of over 700 service stations, to concentrate on growing its sales of petroleum products down the East Coast of North America, said Harry Hadiaris, director at Irving Oil.
For Couche-Tard, the deal strengthens the company's foothold in the key northeastern U.S. market by 124 stores and is a milestone in the retailer's plans for the region, chief executive officer Alain Bouchard said in an interview. The company eventually hopes to operate 500 stores in the region. "The northeast is a focus for us, and we want to grow from this base," he said.
Couche-Tard will continue to evaluate acquisition opportunities across North America, he said.
Close: $15.40, up 59¢